BA 342 EXAM 1
Warren Buffet Quote
"In looking for people to hire, you look for three qualities: 1. integrity 2. intelligence 3. energy" "And if they don't have the first the other two will kill you"
Spiderman Quote
"With great power comes great responsibility"
entertainment
"media are in the business of optimizing the time we spend paying attention to it, which is a poor indictator that its content is worth the effort" hollywood's favorite villain-business love movies with monsters,aliens, business people
Responsible Leadership Financial Times Definition
"responsible leadership: making business decisions that ... takes into account stakeholders such as workers, clients, suppliers, the environment, the community, and future generations"
The moral manager figure 7.8 and section 7.4 b ken frazier ceo of merck
#. of people did die how to help families who were harmed stepping down soon
J&J Reformed Sandi Peterson
#2 person responsibility for everything Change dynamics Recall not technically bad thing Fixer Fixing things at other companies It would take time but its fixable
2013 National Business Ethics Survey
% of US workers perceiving pressure to commit misconduct 28% in 1994 11% in 2005 9% in 2013 90s upper management become liable for code of ethics
Conventional approach (societal norm focus)
*common sense approach -comparison of decision, behavior, or practice to prevailing norms of acceptability
Fortune 1000 Approach to Ethics
- Rules: Found in compliance document - Ethics: Found in code of conduct read behavioral ethics page 262-264 (section 8.5)
Wells fargo 2018-2019
-2019 Manager Firings -Financial Fines $2.7 billion -2019 Shareholder Lawsuit $393 million -2019 retirement scandal -2020 DOJ/SEC fine -Diversity issues -Summer 2021 proposed layoff
Beware of Ethical Danger Zones
-Conflicting goals -Fear of retaliation -Avoidance -Rationalization -Lowered thresholds -Euphemisms -Evaluation Time
Wells Fargo & Customers
-Fake accounts (3.5 million) -Car insurance fraud (800,000 cars-$1 billion penalty) -401K Fee Scandal -Wealth Mgmt Scandal -Mortgage Fraud ($2 billion) -Frozen Asset Growth by Fed -Unfair foreign exchange practices -$575 million charge all 50 states -employment lawsuit on unfair firing -bottom line impact
Michigan State & Gymnastics Stakeholder Analysis
-Nassar Victims -Michigan State University -NCAA -other universities -gymnastics program -all sports michigan -media -faculty & staff -students -alumni -families -trustees -activists groups -simon (president) -lawyers -public relations -ethics & compliance -internal report -community -local businesses -new businesses
Characteristics of Moral Managers
-These managers conform to a high level of ethical or right behavior -They conform to a high level of personal and professional standards -Ethical leadership is commonplace - they search out where people may be hurt -Their goal is to succeed but only within the confines of sound ethical precepts -high integrity is displayed in thinking, speaking and doing -these managers embrace the letter and spirit of the law -they process acute moral sense and moral maturity -"good guys"
The Growing Anticorruption Movement
-Transparency International-was modeled after the human rights group Amnesty International Our vision: A world in which government, politics, business, civil society, and the daily lives of people are free from corruption" -Corruption Perception Index-puts on international policy agenda, list countries as highly clean or highly corrupt Bribe Payers Index-ranks leading exporting countries in terms of the degree to which international companies with their headquarters in those countries are likely to pay bribes to senior public officials in key emerging market economies -OECD Antibribery Initiatives- agreed to ban international bribery and to ask each member nation to introduce laws patterned after the U.S. FCPA in its country, failed not doing enough quickly enough UN Convention against Corruption-the opportunity to develop a global language about corporation and a coherent implementation strategy Countries also have own individual country initiatives
The Six Elements of an Ethics and Compliance Program
-Written standards of ethical workplace conduct. -Training on standards. -Company resources that provide advice on ethics issues. -A process to report potential violations confidentially or anonymously. -Performance evaluations of ethical conduct. -Systems to discipline violators.
Penn State Students Productively & Morally Engaged
-dance marathon (10 million ) -smeal #1 for recruiters -44 smeal orgs - 1000+ psu orgs -red shoes walk against sexual assault -31 sports "success with honor" -community service-thousand of hours -mentor/coaching/tutoring thousands of students -belief in ethics, csr, sustainability, diversity -thousands of hours helping family -counseling/support of friends in need -research & teaching assistance -thousands of hrs -working toward educational degrees honestly -participating in faith activities all regions
4 competencies of BA 342
-ethical decision-making -sustainability -diversity -corporate social responsibility (CSR)
Technology & Trouble Personal
-favor quick fixes -fear & worship technology -blurried lines between real & false -accept violence as normal -love technology as a toy -we live distanced and distracted -communication better or worse -relationships better or worse -knowledge better or worse -ethics better or worse
Tylenol & Ethical Decisions
-pong -took responsibility early -rebuilt brand through safety -corporate culture impact -leadership j&j credo (order of focus) 1. customers 2. employees 3. communities 4.stockholders
Ethics & Tech
-privacy of info -security of info -government and tech Chapter 9 readings (page 272-290)
Right and Wrong
-situational -relative -contextual -cultural it all depends these are the wrong places to start on ethics
Motivation to commit fraud
-unable too pay personal bills -desire for luxury items -drug, alcohol, gambling addiction -tragedy illness, divorce -wanting to look good in some arena -medical bills & debts
Rationalization to commit fraud
-underpaid -not appreciated at work -company does not need funds -company deserves to lose -they won't miss this -just borrowing and will pay back -looked over for promotion
Red Flags of Fraud- Some warning signs that may indicate the fraud risk
-wheel and dealer -domineering/controlling -don't like people reviewing their work -strong desire for personal gain -have a "beat the system attitude" -live beyond their means -close relationship with customers or vendors -unable to relax -often have a "too good to be true" work performance -don't take vacation or sick time or only take leave in small amounts -often work excessive overtime -outwardly, appear to be very trustworthy -often display some sort of drastic change in personality or behavior
Horses & Fraud Dixon, ILL.
1 court wire fraud City clerk found it when Dixon was on vacation —-> FBI agent -salary 80,000 year -breeding business -first year $150,000 out —> bought better horse -small town, big fraud comptroller accused of $30 million theft -all money came, she managed that & then paid the bills- no one checks her work -Dixon, Ill. (Pop 16,000), Rita Crundwell (59) comptroller April 2012 thru 2017 to today
Ethical decision making assessment framework
1. Awareness 2. Facts 3. Stakeholders 4. Standards 5. Values 6. Actions
Factors influencing Employee Unethical Behavior
1. Behavior of Superiors 2. Behavior of Peers 3. Industry Ethical Practices 4. Society's moral climate 5. Policy (or lack thereof) 6. Personal Financial need
Influences on Behavior from Most influential to least influential
1. Behavior of superiors 2. Behavior of one's organizational peers 3. Ethical practices of one's industry or profession 4. Society's moral climate 5. Formal organizational policy or lack thereof 6. Personal financial need
Global Business Ethics Survey Top Misconduct Categories
1. Bribes & corruption 2. fraud/ lying & theft 3. regulatory violations 4. employee abuse 5. contracts misconduct global issues bullies-weakest among us but can happen in companies
Ethical Tests
1. Common sense- #1 most important 2. Best self - does it meet the character I want to be 3. Venting others - go talk to people before you go off 4. Purified idea- don't know what to do go to authority figure 5. Gag test -dumbest throw up a little if you go forward 6. Big four
Proposed Consumer Privacy Bill of Rights
1. Individual control: consumers have a right to exercise control over what personal data companies collect from them and how they use it 2.Transparency: consumers have a right to easily understandable and accessible information about privacy and security practices 3.Respect fro context:Consumers have a right to expect that companies will collect, use, and disclose personal data in ways that are consistent with the context in which consumers provide data 4.Security: consumers have a right to secure and responsible handling of personal data 5. access & accuracy: consumers have a right to access and correct personal data in usuable formats in a manner that is appropriate to the sensitivity of the data and the risk of adverse consequences to consumers if the data is inaccurate 6.focused collection: consumers have a right to reasonable limits on the personal data that companies collect and retain 7.accountability: consumers have a right to have personal data handled by companies with appropriate measures in place to assure they adhere to the consumer privacy bill of rights
Elements of Moral Judgement (pg 217)
1. Moral Imagination-ability to perceive that a web of competing economic relationships at the same time a web of moral or ethical relationships 2. Moral Identification and Ordering-refers to the ability to discern the relevance or nonrelevance of moral factors that are introduced into a decision making situation 3. Moral Evaluation-practical, decision phase of moral judgment and entails essential skills such as coherence and consistency that have proved to be effective principles in other contexts 4. Tolerance of Moral Disagreement and Ambiguity-simply an extension of a managerial aptitude that is present in practically all decision making situations managers face 5. Integration of Managerial and Moral Competence-necessary capability to make ethical decisions in organizations 6. A sense of Moral Obligation-the foundation for all the capacities
Sexual Harassment 3 things to know
1. You are involved (if someone tells you that they are being sexually harassed) 2. You are not smart enough, big enough to do this on your own GET HELP 3. Follow up - follow up - follow up
ethical decision making framework
1. awareness 2. facts 3. stakeholders 4. standards 5. values 6. actions
three approaches to ethical decision making
1. conventional approach (societal norm focus) 2. principles approach (moral guideline focus) 3. ethical tests approach (applied guideline focus)
Ethical decision making an individual process
1. ethical awareness 2. ethical judgment 3. ethical behavior
Five Principles of a High Quality Ethics & Compliance Program
1. ethics central to business strategy 2. ethics & compliance risks are identified, owned, managed and mitigated 3. leaders build/sustain a culture of integrity 4. the organization values reporting of concerns & suspected wrongdoing 5. organization takes action and holds itself accountable
Identify what makes an ethically healthy organization
1. few employees feel pressure to compromise organizational ethics standards 2. misconduct is rare 3. observations of misconduct are reported 4. reports of misconduct are appropriately addressed 5. employees who report misconduct do not experience retaliation
Smeal Strategic Plan 2014-2019
1. providing extraordinary education 2. highest quality research 3. building our cultures: -integrity -diversity -service -sustainability
Responsibility Today
2012 Sanctions Applied Sanctions repealed Jan 16, 2015 Penn State Sandusky Scandal Jerry Sandusky -second mile young kids engage with others mentor all over states & home where you could live -molested young boys -happened in showers at Penn State
McKinsey Report on Auto Industry
4 disruptive technology trends 1. connectivity 2. diverse mobility 3. autonomous driving 4. electrification US- 287.3 milliion autos Global-1.4 billion cars
Last year _____% of U.S. workers said they observed unethical or illegal misconduct on the job
41 *ethical lapses tend to snowball
Sources of values- External
5 external sources: religious, philosophical, cultural, legal and professional values
More organizations are recognizing the value of creating ethical workplace cultures. The percentage of companies with "strong" or "strong-leaning" ethics cultures climbed to
66 percent last year, up from 60 percent in 2011, according to the National Business Ethics Survey of 6,420 employees.
what % of college students have cheated while in school?
70%
Economics Invisible Hand-1700s
Adam Smith Scotland 1723-1790 Ethics Professor "A wealth of nations" published 1776 "theory of moral sentiments" published 1759 who is adam smith? a moral philsopher & an economics thinker do what we are good at & trade except when people don't trade fairly or gain system
Tech Power Brokers
Apple facebook google Hooked-Nir Eyal Technology platforms That are sticky Psychology of addiction Do not manipulate customers but if it is benefit it is okay to make sticky
Playing any sport? You step out of bounds? Can you do the right thing?
Are you willing to call a foul on yourself? Frank Molinaro- Penn Stater Rio Olympics opponent bite him
Apply sexual harassment to values framework
Awareness: Facts: Stakeholders: Standards: Values: Actions: 1)duties 2)rights/justice 3)utilitarianism 4)virtue
Glass Enterprise (EE) 2017 Relaunch for Business
BA 342 Privacy and Security
Facebook Benefits and Side Effects
Benefits: Simple to use Keep in touch Share your life Promote products Education platform Free? For user Run special events Make friends Track birthdays/anniversaries Business Personal branding Side effects: Privacy leaks Date used by? Addictive Bullying Anti social Fake profiles Work issues Selling your data Frequent ads Stalking Connectivity Ease Settings issues Courting controversy
Technology-Pros and Cons
Benefits: Increase in goods/services, decrease in labor to produce, labor - safer and easier, increase in living standards Side effects: depletion of natural resources Technology unemployment Environmental pollution Creation of unsatisfying jobs
Bernie & Barbara 2011 wizard of lies
Bernie in jail -very composed -happier now than I have been in my entire life -doesn't miss his old life -ruined his family -I understand why clients hate me -I dont believe I am a bad guy can't do what I do without guilt
Workplace and Computer Technology
Biometrics: use of body measurements such as eye scans, fingerprints, or palm prints for determining and confirming identity ex. big brother-face scanners, hand scanners, finger scanners Robotics:people have been losing job to robots artificial intelligence: ai embraces software technologies that make a computer or robot perform equal to or better than normal human computational ability in terms of accuracy, capacity and speed cell phones and texting:6 billion texts/day..cell phones often create ethical and legal implications technology while driving bad
Ethical Issues
Boeing 787- DreamLiner 3 or 4 years late to game in supply chain -probation on defense side -private commercial airplane business
Corona Virus and License Plates
Britain- use cameras you are in London & in lock down, but driving to pub in another town that is open
342 Textbook Definition
Business ethics: concerned with morality & fairness in behavior, actions, policies, and practices that take place within a business context
Connected cars & Big Data
Cars know a lot about us
Wells Fargo oct 2019 - present
Charlie Scharf New CEO Pct 2019 Note: 2020 new board chair Charles Noski new board chair
Some legal rights and claimed moral rights in today's society
Civil rights minorities rights womens rights disabled peoples rights older peoples rights religious afficilations rights employee rights consumer rights shareholder rights privacy rights right to life right to work criminals rights smokers rights nonsmokers rights aids victims rights childrens rights fetal rights embryo rights animals rights right to burn the american flag right of due process right to choose gay rights
business school & ethics moral disengagement & college
College Students ethics moral disengagement? -clicker violations -having someone write your paper -buying paper on internet -social media bullying -selling others intellectual property -using technology in class for non class activity -trying to get exam questions to cheat -general disrespect of anyone in authority -alcohol abuse -bullying -sexual abuse -trying to get exam questions to cheat -outright cheating on assignments
Corporations & Culture
Culture -shape attitudes -reinforce beliefs -direct behavior -set expectations
Which below is NOT side effect of technology?
Decrease in labor to produce
J&J trolley problem/applying ethical principles to decisions
Deontological- duties: I want to care for everyone of our customer's pull product from everywhere Rights/justices: customers have right to be safe, do we want to make sure those who lost their live have justice —in those 7 people or in chicago Teleological-consequences: only see 1/2 dozen stores & they are in Chicago, go to Chicago, pull those Tylenol off shelf's/market Virtue:J&J have 4 credo: this is who we are, going to pull products, put customers first
Fraud Triangle
Donald R. Cressey came up with this hypothesis to explain why people commit fraud 3 key elements in fraud triangle are opportunity, motivation, and rationalization *businesses have most control over opportunity
Economics: vs Ethics:
Economics: Bounded Rationality Ethics: Bounded Ethicality
corporate case in corporate dilemma
Enron leadership team Aug 2001 ken lay, jeff skilling, andy fastow owned distribution of power 1985 form company trading system energy trading two big energy companies buy power plants ---> Enron classic case darling of wall street becomes bankrupt quickly Enron hall of shame -andrew fastow: CFO Jail -Founder Ken Lay-died no jail Jeff Skilling-Ceo JAIL Enrons ethic code is based on respect, excellence, integrity, communication but enron offshore, partnered with banks, take out what looks like loans had two books
Economics Eras Technology & Time
Era: hunter/gather Agrarian Industrial Informational Knowledge Time: From Beginning From 2000 BC 1760's-1940's 1940's-1990's 1990's to present Key: 1 in 1 out 1 in 50 out 1 in 2,500 out 1 in ? 1 in ?
BA 342- Big Topics Leadership Competencies
Ethical Issues in Business Sustainability Diversity & Inclusion Corporate social responsibility Responsible Leadership
Ethical tests approach (applied guideline focus )
Ethical tests maybe car companies
Ethics Personal & business
Ethics very driven by individuals making decisions
E.A.P.
Excellent Performance Academic Integrity Professional Behavior
Michigan State
Failure at the gym - remember trust and value Larry Nassar & USA gymnastics & michigan state & usoc -abusing girls under medical treatment -300 women -stars athletes & olympians
Talk about it- a lot
Finally, ethics needs to be brought up regularly so that it stays at the top of employees' minds. Ask managers to raise ethics questions in meetings. Encourage top executives to speak to it, as well. Managers can't monitor employees' every move, but they can help them recognize the right thing to do when company priorities clash.
Benefits & Side Effects Drones & People
For exam figure out benefits and side effects Drone Data -military, commercial, consumer
Ethical tests maybe
Ford motors: Chicago $9 million sex harassment 2015 General Motors: National $900 million safety 2013-2016 Volkswagen: $36 billion emissions 2009/2020 Tests allow us to ask questions prior to ethical concern
Fraud Triangle Need 3 components
Forensic Accounting ex. Enron going back into books
Media dilemma
Gallop Survey Dec. 2016 % Rating group high to very high on honesty nurses and doctors and miltary are very high car sales congress business low
ECI Research on Misconduct
Global Business Ethics 2020 Report #1 -ethics.org -scroll to "read the GBES report" -scroll down and select not a member -you can download the report
Volkswagen "Clean Diesel" USA for Buyback
Goal: dominant in marketplace sell more cars than anyone clean diesel technology could not be true tested differently if in one place clean diesel-make commercials -used clean diesel multiple times
In the list below which is not one of j&j's keys to managing their crisis well?
Good public relations was critical
Artificial Intelligence
Google home "Okay google" Amazon Echo "Alexa"
Bribes Compared to Grease Payments
Grease payments: relatively small sums of money given for the purpose of getting minor officials to: -do what they are supposed to be doing -do what they are supposed to be doing faster or sooner -do what they are supposed to be doing better than they would otherwise do -money given to minor officials (clerks, attendants, or customs inspectors) for the purpose of expediting (get through red tape) Bribes: relatively large sum of money given for the purpose of influencing officials to make decisions or take actions that they otherwise might not take. If the officials considered the merits of the situation only, they might take some other action. Money given, often to high ranking officials - purpose is often to get these people to purchase goods or services from the bribing firm
Can you teach ethics?
HR professionals help lay out the expectations for employees by developing written standards of ethical workplace conduct, providing training to make sure everyone is aware of the expectations and equipping managers to reinforce the company's values through their actions.
Ethics & Relationships
Harry Stonecipher -president of Boeing no strike policy -work on culture -come off of probation **problem-could've derailed -Boeing exec Debora-doesn't directly report but metaphor goes Harry/Debby met go out for cup of coffee-comments back and forth on company email -an affair
Should Harry have lost his job?
Harry ends up divorced Harry and Debby marry Power relationship because him CEO & she a executive he left the company
Ethical Imperialism
Home Country -Cultural standards -ethical/moral standards of home country even if travel to another country
Cultural Relativism
Host Country -Cultural standards -ethical/moral standards of host country "When in Rome, do as Romans do"
managements ethics model: immoral
I am going to manage the company in way that benefits myself ex. the immoral manager book- figure 7.7 bernie madoff & ponzi scheme -give me your money, got formula that will make you money -charles ponzi went to people if you give me your money, I can double it in 45 days but 90 days, I can double it again -bringing in more & more money -financial crisi 2008/2009 cant give people there money, son turns him into fbi
Applying Ethical Principles to Decisions
INSERT CHART Deontological (Duties) -Duties Kant's Categorial Imperative (immanuel Kant): you have a duty to all individuals in sight internal or external ex. You should act as if this was rule for world, is this going to be acceptable -rights/justice rights figure 8.1 list (fairness principle) (john Rawls, john Locke): right for safety Teleological Results: -Consequences & Results Utilitarianism (Jeremy Bentham & John Stuart Mill): greatest good for most people -Virtue who you are (Aristotle, Plato): character results connected to character-your own personal character
Business & Responsibility A license to operate
Intangibles: 53% of total value of fortune 500 or about 24.27 trillion (coke 96% of value) Consumers: 85% reputation responsibility- key competiveness & market positioning Risk management: government, NGO's, Legal' Employees: 3 out of 5 want to work for a values co Investors: 86% instituational investors Operations: Innovation, energy, waste, water
Phantom Expenses
Jane Adams just completed a sales training course with her new employer and assigned to train under Ann Green one of firm's most productive sales reps Inflating expenses: Jane casually remarked to Ann that the training course had stressed the importance of filling out expense vouchers accurately --reporting expenses resulted in underpayment of actual costs --a rule of thumb used was to inflate total expenses by 25 percent --Ann said that even if reported expenses exceeded actual expenses, the company owned them the extra money, given the long hours and hard work they put in Follow the agreed upon practice -Jane said that she did not believe that reporting fictitious expenses was the correct thing to do and that she would simply report her actual expenses ---> Ann got angry (She appealed to Jane to follow the agreed-upon practice, stating that they would all be better off and no one would lose job)
Trolley problem
Kill 5 or 1 worker if train is coming, outcomes or manner in which way you achieve them Switch point but don't push man
Kolberg's Levels of Moral Development
Level 1: focus on self (pre conventional) 1. punish 2. reward Level 2: focus on others (conventional) 3. good 4. law Level 3: focus on all (post conventional) 5. social 6. universal read 209-212
Licenses Plates & Personal Data
License Plate readers - put readers at certain places- helping find kids who go missing/taken bank robber vigilant solutions street level surveillance
Enron
Major Executives Implicated: Andrew Fastow, Jeffrey Skilling, Kenneth Lay Legal/Ethical Charges and Convictions: Securities fraud, conspiracy to inflate profits, corrupt corporate culture
Managers' Influence
Managers play a major role in determining whether employees embrace a company's values Studies also show that people are more likely to override their own ethical concerns if their manager doesn't share those concerns. So, recent survey results that show managers are responsible for 60 percent of workplace misconduct are especially troubling
Fraud Triangle Need 3 Components
Motivation, Opportunity, Rationalization
Does right and wrong work the same in every country?
No Gamestop, Robinhood ethical issue stockholders sold for $20 price went down, then how $400 so stockholder left out of 380
Media dilemma- Gallop Survey Dec 2016 % Rating Group Average to very high on honesty
Nurses high military high clergy high business, congresss, car sales low
Technology & Trouble Corporate
Online scams-identify theft Invasion of privacy vs informed consent Intellectual property rights Stolen data Hacking of corporate knowledge Sharing consumers information Spam Behavioral advertising (cookies) Bio-technology-personal data& genetics Company cell phones Monitoring Information overload
What do we control in the fraud triangle?
Opportunity
Opportunity for fraud
Opportunity for fraud to occur is there opportunity to be provided? Yes lack of internal controls no checks and balances
Ethics and Ethical Decision Making: PONG
P=personal: ethics begins, and in many cases, ends with "personal" or "P". Where things go right, where things go wrong, you will always find people O=organizational: Next ethics is "organizational" or "O". Working in the corporate world, we find that the organization has principles and norms everyone is expected to follow. Thus leaders (people) will set an ethical culture that impacts the organization N=national:third, ethics is "national" or "N". While many nations will have similar ethical protocols (hype-norms), you will find differences in culture and custom. Thus, people in organizations must understand ethics from a national perspective. G=Global: lastly, ethics is "global" or "G". A multi-national corporation, operating around the world, will find that a challenge is to promote their own ethical protocols in the context of other cultures
What do you think we typically consider the most ethical test?
PUBLIC DISCLOSURE Public disclosure-what if this would be lead in paper what if it lead the news
Elements of a Strong Ethics Culture
Page 245-262 Leadership Support Code of Ethics Ethics Officers Compliance Standards Company wide training Clear communication Detection/prevention
What is sexual harassment?
Page 597 1. Quadprolo-went to someone do sexual favor in turn for money or job upgrade 2.hostile workplace-unwanted attention, jokes, touches
Penn State PRRIDE
Penn State Community Responsibility Respect Integrity Discovery Excellence
Ethics is
Personal #1 most important in ethics Organizational National Global
FBI & Smart TV's 2019/2020 update
Put tape over camera Ehance user experience But you have to learn about you, listen and make note of that Can be easily hacked Questionable data privacy protocols Turn off or put tape over camera
Two issues-Two sides- An analogy
Read in book Technological Determinism & ethical lag Tails —- heads 1. Fundality 2.financial monitization
A single word will drive our entire class:
Responsibility
The major course theme is
Responsibility & responsible leadership
BA 342 Theme
Responsibility and Responsible Leadership
Settlements
Sandusky- $109 million 33 victims 2% PSU budget Nassar- $500 million 332 victims
Sources of values- Internal
Several of these "internal" norms that are prevalent in business organizations include: >respect for the authority >loyalty to bosses and the organization >conformity to principles, practices and traditions >performance counts above all else >results count above all else they all form a composite "bottom line" mentality
Synergy
Smeal Strategic Plan: integrity, diversity, service, sustainability BA 342 Topics: integrity, diversity, service, sustainability
threats to privacy (page 281)
Social Networks: social networks allow individuals to establish connections and store information remotely. Default privacy settings provide too much personal information online. This information creates a field day for identity thieves, hackers, scammers, debt collectors, employers, marketers, data miners Hackers: organized cybercriminals known as hactivists participate in phising, onlin shopping fraud, banking fraud, and other deceptions Behavorial advertising: used by advertisers to present targeted ads to consumers by collecting information about their browsing behavior. These techniques create a behavioral profile of you that is used for exploitation Data Stealing: done through rogue applications on social networking sites- computers that harbor botnets and smartphone malware are couple that may be after you Facial recognition- facebook now gather data or recognize your face GEO-tags-used when photos or videos are taken with GPS equipped device
Big Data- IS Everywhere
Speed of Technology Technology is ruling us more than 570 new websites every min 692 million tweets per day instagram 1 billion + users 1 in 7 divorces blamed on facebook
Ethical Decision-Making Process
Step #1: Awareness: What are the ethical concerns or issues? Step #2: Facts: What is known or unknown in this situation? Step #3: Stakeholders: What individuals or groups are affected or will be affected? Step #4: Standards: Are there any laws, policies or professional standards that apply to this situation? Step #5: Values: What personal or organization values apply? Step #6: Options/Action: What options do you have? What actions will you take? Note: Consider Rules Versus Values: Many companies follow a rules based approach to ethics. However, a values based approach is a preferred method to develop sound ethical practices.
So what does it all mean?
Technology & Ethics -should be at top of mind for all leaders -massive explosion of data -exponential times -need for greater understanding of privacy -post COVID babies
Moral Philosophy categories
Teleological and Deontological
Internet of Things
Television Seeing & Hearing Privacy talk to a friend With this act, your tv can watch you, you can turn camera on browser no led light showing camera is on TV=computer
Bounded ethicality
Texas -rational people -process info --> rational decisions people are rational but only boundedly so
Ethical Tests Address
The Big Four Greed, Speed, Laziness, Haziness Moment of truth an ethical test- steal product, change inventory invoice Best self ex. I am not this person who steals Venting to others ex. Tell someone scenario what would you do
Driverless cars & Ethics
The ethical dilemma of self driving cars reaction vs decision Accidents may look more premeditated because looks like it is programmed
Read in canvas
The fraud triangle & what you can do about it- 2 pages Creating an ethical workplace-hr mag-5 pages Lot of data, understand themes
Wells Fargo CEO 2018
Tim Sloan an ex ceo reached out to 120 million customers to come in if they want to talk -wells fargo ceo slogan on regaining trust of customers -wells fargo commercial 2018/2019 resestablished in 2018 we were great/amazing then we were not -John Stumpf CEO wells fargo in 2016 left company leading this stuff -tim sloan new ceo oct.2016 appt. left -betsy duke new board chair starts jan 1. 2018 left -allen parker new ceo march 2019 left
Volkswagen & Fines
Total fines dec. 2020 = $35 billion & rising -nations, class actions, shareholders, environmental groups, regions/states VW admitted to 3 accusations civil & criminal penalities executives fired & in jail VW car graveyard
Trust =
Value Wells Fargo-232,000 employees Volkswagen- 670,000 employees most people trying integrity, some are not whenever we destroy trust, emotional value attached to that
Smeal honor code
We, the Smeal College of Business community, aspire to the highest ethical standards and will hold each other accountable to them. We will not engage in any action that is improper or that creates the appearance of impropriety in our academic lives, and we intend to hold to this standard in our future careers.
Responsability& Well Fargo
Wells fargo accused of creating fake accounts -2010-2011 cultural shift high pressure sales culture sell lots of products to customers ... cross selling (in store to buy lobster but we have smon..) --> pressure from bosses so high ---> they/employees opened accounts -Wells fargo code of ethics online --> "Well's fargo reputation as one of the world's great companies for integrity & principled performance" -consumer financial protection bureau (CFPB) -Wells Fargo had 4 different CEOs -tip of iceberg culture gets rough
Trust=Value so Avg. Shareholder decline when CEO indiscretion accounced
With Amazon, Jeff CEO 2019 and Mackenzie Bezos gets divorce- givining pledge... wealthy person give 80% of wealth away philanthropic
What is an Ethical Culture?
Workplace culture includes how employees dress, how they work with customers and how they interact with their bosses.
Is sexual harassment explicitly prohibited in workplace?
World policy analysis center China only harassment of women but now just updated to woman and men
opportunity
ability to commit fraud *fraudsters must believe that their activities will not be detected or when employees have access to assets and information that allows them to commit and conceal fraud opportunity is created by weak internal controls, poor management oversight, and/or through use of ones position and authority
Technology Definition
all the ways people use inventions and discoveries to meet needs and wants
motivation
also referred to as incentive is another aspect of the fraud triangle, it is a pressure or "need" felt by the person who commits fraud addictions such as gambling and drugs can also motivate someone to commit fraud
immoral management
approach that is devoid of ethical principles or precepts and at the same time implies a positive and active opposition to what is ethical management's motives are selfish and that it cares only or primarily about its own or its organization's gains characteristics: -these managers intentionally do wrong -these managers are self-centered and self-absorbed -they care only about self or organization's profits or success -they actively oppose what is right, fair or just -they exhibit no concern for stakeholders -these are the "bad guys" -an ethics course probably would not help them ex. enron ex. everyday questionable practices -stealing petty cash -cheating on expense reports -taking credit for another person's accomplishments -lying on time sheets about hours worked -coming into work hung over
Training at Lockheed-Martin
ask 4 questions ask questions obtain data talk to others reframe the issue report violations leadership all over ethics culture
phantom expenses value framework
awareness: are you being directed to falsify your expenses? facts: who is ann? how do you know everyone is doing this? kind of expenses, frequency of reports, total dollars involved stakeholders: you, ann, other sales people, dept., magr. other departments, clients, shareholders, hr, legal & compliance, media, family standards: company guidelines industry protocols, legal guidelines values: your values, company stated values actions
The Foreign Corrupt Practices Act (FCPA)
became a criminal offense for a representative of an American corporation to offer or give payments to the officials of other governments for the purpose of getting or maintaining business differentiates between bribes and facilitating payments also called grease payments - grease payments are relatively small sums of money given for the purpose of getting minor officials
if you go in to work, who is my boss?
boss highly ethical this is way, game is played you'll act ethical
HR professionals=
both guardians and champions of the ethical culture in their organization *As guardians, they have a duty to protect their organizations' employees, customers and clients from unethical conduct. As champions, they can help their organizations flourish by promoting ethical values in daily operations and by building trust As guardians of their workplace culture, HR professionals can not only lead the charge for ethical values but also inspire and empower employees at all levels to do the right thing. And they'll create a stronger organization in doing so.
Honest Tea & Honesty Challenge
bought by Coca Cola -work out differently in different parts of world -11,500 participants unmaned kiosk $1 for tea without workers but recording them some even put $5 in and only took 1 out alamba 100% honest hawaii 100% honest
Can you teach ethics or make some ethical?
can't make someone ethical, can heavily show ethical skills/sensitized
Ethical decision making framework
case: drug use in the workplace the office jim & dwight drug use values framework awareness: worker possibly using drugs, poor decision making, productivity impact, health and safety, liability facts: what drugs? length of use? how often are used? are they prescribed? stakeholders: accused employee, you the friend, his/her manager, media, police, HR, EHS, shareholders standards: laws (local, state, federal), company policy, industry policy, field standards values: actions:
as the weed spreads
colorado 1st state legalized biggest state legalized= california U.S public opinion on legalizing it has grown -33 states medical -11 states recreational -65%+ pop. legal state war on drugs put a lots of people in prison 2009 commercialization 2013 legalization
Right and Wrong Exercise
contestant number one someone from philadelphia owner of superstore HH Gregg pickup flat screen tv, pick it up, and worker offers to take it & ring it up but guy didn't want to pay contestant number two someone from NYC I need a tv but i have 6 kids and I am struggling what does this mean? entire world has sense of these values
ethics environment
corporate & media dilemmas
The most frequent and highly publicized ethical problems with respect to global business have most recently been
corruption, bribes, and questionable payments
a culture where misconduct is tolerated or worse encouraged...
could result in higher turnover, lower productivity, and a diminished reputation and profitability *On the other hand, companies that work to build and maintain ethical workplace cultures are more financially successful and have more motivated, productive employees, studies have shown.
International business ethics book pg 318-328 (chapter 10)
cultural relativism hyper norms in middle (things we share ethically across all nations) ethical imperialism custom & culture
rationalize
determining that committing fraud is OK for a variety of reasons Rationalization=crucial component in most frauds Rationalization involves a person reconciling his/her behavior with the commonly accepted notions of decency and trust
Institutional voids
exist in these settings such that multinational businesses are left trying to enforce the rules and regulations of their home countries without virtually any guidance or support from legal, judiciary, or even cultural norms
management ethics models - amoral
figure 7.10 in book amoral-doesnt think about ethics, try to be profitable but don't think about unintended consequences dominos 30 mins or free (1973-1993 &today) -fill out dominos value framework cons driving too fast, wrestling matches at door big dogs, pizza hut/dominos what are you doing in your 30 mins
managers may display moral management by
giving proper credit where it is due always being straightforward and honest when dealing with other employees treating all employees equally being a responsible steward of company assets resisting pressure to act unethically recognizing and rewarding ethical behavior of others talking about the importance of ethics and compliance on a regular basis
Corruption
global business continues to be an overarching problem. It starts with outright bribery of government officials and the giving of questionable political contributions -attempt to influence the outcomes of decisions in cases when the nature and extent of the influence are not made public
Bounded ethicality
guy about to walk off of cliff, did action ugh no why did I do that- miss or mr good/bad on shoulder pleasing boss rather than doing something right get goal by any means systematic systems-people ethically make questionable behaviors fit in---> organizational pressure & psychological situational factors
Southern Co
had guy from prison come in to talk about how a good person could stray away and take a bad path he also talked about reading the code of ethics
j& j
highest in pharmacuetical sales then medical device sales then consumer sales
General Public graded business people pretty low on ethics same at home, business people operating ethically, investment industry neg, grade for honesty
however business leaders ranked high
What impacts mangers & employees morality
inside - to outside your personal situation, organization's moral climate, industry's moral climate, business's moral climate, society's moral climate
Managing Org Ethics
inside: superiors, policies, peers ---> individual-one's personal situation which makes up organization's moral climate then industry's moral climate ---> then business's moral climate ---> society's moral climate
amoral management
intentional amoral management >do not factor ethical considerations into their decisions, actions and behaviors because they believe business activity resides outside the sphere to which moral judgments apply -these managers dont think ethics and business should mix -business and ethics are seen as existing in separate spheres -vanishing breed unintentional amoral management >do not think about business activity in ethical terms but for different reasons -these managers forget to consider the ethical dimension of decision making -they dont think ethically -they may lack ethical perception or awareness -they are well intentioned but morally casual unconscious biases-sometimes amoral managers may be unconcsious of hidden biases that prevent them from being objective managers permit free rein compliance strategy: lawyer driven and is oriented not toward ethics or integrity but more toward conformity with existing regulatory and criminal law
bribery
is the primary form of corruption found in global business and its practice merits closer examination
Wells fargo org. structure
little reg. bank exec (3) branch managers (5,700) 5,300 tellers lost their job but no one in leadership lost their job
Advertising
long history doing things that arent that great
corporate dilemma
loss of trust and value ex. enron, volkswagen, wells fargo, tyco
Cost to employers issue to address
lost productivity ($200 billion/year) absenteeism (75-78% higher) accidents (55% more likely) injuries (85% more likely) litigation (general & across states) safety (equipment or non equipment) compliance & risk health costs
What's it all mean with corporate dilemma
make mistake and everyone sees create an environment
common rationalizations include
making up for being underpaid or replacing a bonus that was deserved but not received. A thief may convince himself that he is just "borrowing" money and will pay it back one day
moral minimums
managers also need to decide what will represent their moral minimums with respect to these and other issues -managers will need to be guided by ethical concepts at their disposal
More and more companies are providing ethics training
many companies provide online ethics training which can be easier to administer and track
workplace & marijuana
marijuana outside workplace -drug free when enter workplace -impairment cant measure -budding issue = short term memory loss -estimated $120 billion lost in productivity
J&J tylenol case
mary kellerman had seixure at 12 years old had stroke, tylenol deaths 1982 some pills laced with potassium cyanide police in chicago drove through town get rid of products
Advertising reinforcing stereotypes
model: bar refaeli & movie extra jesse heiman
management ethics model
moral -think about stockholders -think of unintended consequences the moral manager book figure 7.8 merck bitten by black flies-eventually go blind, college age get hit with blindness, riverblindness the 1987 decision mectizan-2.5 billion pills for free developing country, didnt have money to give to merck,, still in 2021 donates, children and older dont have to go blind
moral management
moral management: conforms to the highest standards of ethical behavior or professional standards of conduct "will this action, decision, behavior, or practice be fair to all stakeholders involved as well as the organization?" the integrity strategy is characterized by a conception of ethics as the driving force of an organization habits of moral leaders: 1. they have a passion to do right 2. they are morally proactive 3. they consider all stakeholders 4. they have a strong ethical character 5. they have an obsession with fairness 6. they undertake principled decision making 7. they integrate ethics wisdom with management wisdom ex. navistar
impact of culture (U.S. Data) Leadership Driven
more strong leaning in culture than weak/weak leaning have all components of strong culture
Type of Media Influence on Business
news ads movies internet tv social media
Government & Technology Security & Privacy
no consistent protocols
case: phantom expenses page 668 in book
pading=adding descriptive vs normative ethics
management's ethics models
page 199 immoral moral amoral
Antibribery Provision of FCPA
page 321
responsibility
personal & corporate
ERC report large companies
poor ethics program -pressure to compromise standards high -observed misconduct high -reported misconduct low -experienced retaliation high good ethics program in the list below which is not one of the big 5 types of misconduct? unfairness in employee promotions
ERC Report large companies
poor ethics program -high pressure to compromise standards -high observed misconduct -low reported misconduct -high experienced retailation good ethics program
Kohlberg's levels of moral development
preconventional- how people behave as infants and children, the focus is mainly on the self stage 1: reaction to punishment stage 2: seeking of rewards stage (most of us) conventional-focus on others, conforming to the conventional norms of the group or society stage 3: "good boy/nice girl" stage 4: "law and order morality stage" (many of us) postconventional-few people reach, focus moves beyond those others, develop concept for ethics stage 5: social contract orientation stage 6: universal ethical principle orientation (few of us)
Global ethics datat
pressure in the workplace: possible risk factors and those at risk
pressure/incentive rationalization opportunity
pressure/incentive-pressure on employees to misappropriate cash or other organizational assets rationalization-a frame of mind or ethical character that allows employees to intentionally misappropriate cash or other organizational assets and justify their dishonest actions opportunity-circumstances that allow an employee to carry out the misappropriation of cash or other organizational assets
2015 economic impact colorado marijuana
sales= $996 million economic impact state=2.39 billion jobs created= 18,005 2015 tax revenue= $150 million 2020 sales= $2 billion economic impact state= billions jobs created= 34,000 2020 tax revenue ($387 million)
ethics defintion
set of principles right conduct underlying values 3 part ethics definition
marijuana impacts personal
short term memory problems impaired thinking loss of balance and coordination decreased concentration changes in sensory perception impaired ability to perform complex tasks decreased alertness decreased reaction time
millennials & ethics
social networks & millennials what they post percent reporting -job feelings (40%) -bad joke on boss (26%) -work information (26%) -photo of co worker drinking (22%) -annoying habit of co worker (20%) -opinion on co worker politics (16%)
Hypernorms
standards so basic that they are universally accepted be healthy, safety, and freedom -widespread consensus that the principle is universal
Values Framework & Responsibility
structured way to address and resolve an ethical dilemma
Business & Media institute
study of prime time television 77% of plots involving business were negative
Business roundtable study high school students
survey results on what business people would do: 74% falsify finances 68% secret dumpings of toxic waste 62% blackmail normal 53% sabotage competition's facilities 17% injure/murder if you knew too much
linda trevino (smeal ethics)- ethical culture
talk about culture rather than program create ethic program is easy can set up not difficult training & have hotline very different to create culture but if program not baked into culture hard
Not many Americans believe that leaders
tell the truth (15%)
Responsibility
the ability or authority to act or decide on one's own without supervision
Business owners and executives must take control of fraud by working on the portion of the fraud triangle over which they have the most control:
the opportunity to commit fraud
J&J 2009 to Today a New Story
they didnt take responsbility early motrin tablets -recall -waited year for -too strong or had metal specs.
responsible leadership
trust = value
Penn State & NCAA Stakeholder Analysis
try to bring back culture -sandusky victims -psu university -ncaa -other universities -football program -all sports psu -media -psu faculty & staff -psu students -psu alumni -paterno family -psu trustees -activists groups -spanier, curley, shultz -mcQueary -lawyers -public relations -ethics and compliance -freech report -families -emmert & others -local business -centre county folks -new business
amoral manager book figure 7.9
unintentional doesnt think about ethics
responsibility today
volkswagen- lots of pollution cheated emission tests -- fixes aren't sufficient wolfsburg germany, morgantown, wv, sacramento, ca central valley ca air quality poor
weak vs strong leadership
weak leadership 3x less likely to act ethically/report ethical misconduct weak leadership 49% moderate leadership 25% strong leadership 13%
trust & value culture & performance =
wells fargo
branches of ethics
what is descriptive ought to be normative page 90 descriptive: describe what is actually happening normative: okay what are norms how do we bring people back
